Producer of famous Becherovka liquor compensated for 2012 prohibition losses

The company Jan Becher- Karlovarská Becherovka which produces the famous Czech herbal liquor Becherovka created in 1807 has received close to one hundred million crowns in compensation for losses suffered during the government-enforced prohibition in 2012. No other company on the market received compensation.

Photo: Kristýna Maková

The three-week long, government-enforced ban on spirits went in force in September 2012 at the height of a methanol poisoning scandal involving methanol-laced bootleg spirits that claimed 40 lives and left many others with chronic health problems. The ban on home sales and export of spirits cost producers tens to millions of crowns, losses further deepened by a natural slump in spirits sales due the methanol scare. Becherovka was one of the hardest hit, reporting losses to the tune of 100 million crowns as a result of the enforced prohibition alone. According to a company spokesman their sales dropped by 12 percent year-on-year. The estimated 100 million crown losses include not only a drop in home sales and exports but the extra expenditures brought on by the need to meet new requirements such as giving its products new duty stamps.

According to the news site E15 its losses were almost fully covered under a foreign insurance contract with the Pernod Ricard Group, to which Becherovka belongs. The company reportedly received the equivalent of 96.5 million crowns from an unnamed foreign insurance company.

The spirits producer Rudolf Jelínek, which suffered losses to the tune of 50 million crowns, was left high and dry, as were all the other spirits producers insured in the Czech Republic. According to Jaroslav Burkart from the Union of Producers and Importers of Spirits no such insurance exists in the Czech Republic. Although some of these companies originally said they would ask for compensation from the Czech state, according to the Finance Ministry none of them has so far filed such a request.